Organic claims and the CCA

What is an organic claim?

An organic claim is any claim that describes a product as organic, or the ingredients used to make a product as organic—for example, '100% organic', 'Made using organic ingredients' or 'Certified organic'.

Every day, Australian consumers are faced with myriad labelling claims, all designed to influence purchasing decisions. These claims might be about where a good is made, the type of ingredients it contains or the way a good is manufactured.

Organic is one such claim. Products labelled as organic generally attract a premium price compared to those produced using artificial fertiliser, chemicals or pesticides and non-essential food additives or processing aids. Because organic produce is becoming more popular, some businesses may be tempted to promote their goods with an organic claim. Sometimes the claim will be made but not substantiated, while in other cases unscrupulous operators will make the claim knowing it is untrue but looking to take advantage of consumer preferences.

Consumers purchasing organic goods should be able to have confidence that any organic claim on packaging or in store is true and accurate. The Competition and Consumer Act 2010 (the CCA) can help ensure that products being sold as organic are in fact organic.

The CCA is complemented by voluntary industry standards specifying particular requirements to be met in relation to the use of the term ‘organic’.

AS 6000–2009 Organic and biodynamic products

On 9 October 2009 Standards Australia released AS 6000–2009 Organic and biodynamic products (the Australian standard), which outlines requirements to be met by growers and manufacturers wishing to label their products ‘organic’ and ‘biodynamic’ under this standard.

In developing this Australian standard, input was received from relevant stakeholder groups, including industry, consumers, retailers and regulators. As a result of the rigour and transparency of the drafting process, this standard is likely to be a useful reference point when determining whether a product is organic.

AS 6000–2009 could assist the ACCC in two ways:

  1. Where a trader claims that their products meet AS 6000–2009, the ACCC will assess the product and the overall impression created by the product’s label, packaging and advertising materials against that standard.
  2. Where a trader claims that their products are organic but does not refer to any particular standard, the ACCC may use AS 6000–2009 as a reference point when assessing whether the organic claim is misleading or deceptive.

All organic standards in Australia are voluntary. However, all organic claims, whether they reference a standard or not, should be able to be substantiated. If a business claims to meet a particular standard, it must ensure that this claim is true.

'Certified' products

Many products carry a symbol, logo or other trade mark to show that they are certified organic. This certification is provided by various private bodies and the minimum standards required to get certification may vary.

Some standards will require that businesses also meet a certification scheme. If a certification scheme contains requirements additional to those contained in the standard, then a buisness must also comply with these conditions in order to claim that they are 'certified organic' according to that standard.

A business that labels its product as certified organic must ensure that its product is actually certified. Any business that falsely advertises that its product is certified will contravene the CCA.

The Competition and Consumer Act

The CCA prohibits businesses from misleading or deceiving consumers, or from engaging in conduct that is likely to mislead or deceive. The CCA also prohibits businesses from making a range of false or misleading representations. Fines, injunctions and/or damages may be sought where businesses fail to meet these requirements.

Misleading or deceptive conduct

It is unlawful for a business to make an organic claim that is misleading or deceptive, or is likely to mislead or deceive consumers. This applies to all representations a business makes about its products, whether in an advertisement, over the phone, on its website or on product packaging.

A claim is likely to be misleading or deceptive if the claim creates an overall impression in the mind of consumers that is false or inaccurate. It is important to remember that a selling approach that seems clear and well structured to its designers may nonetheless be confusing to an audience. Businesses must bear in mind that the overall impression that matters is that of the consumer, who may have little knowledge of the product involved.

A blanket claim that a product is organic is likely to mislead consumers if the product is only partly made of organic ingredients. For example, in the case of a blueberry muffin that contains organic blueberries but conventional flour, eggs and other ingredients, a qualified claim such as ‘Blueberry muffins—containing organic blueberries’ could be used to ensure that consumers are not misled.

An organic claim that cannot be easily substantiated (e.g. by reference to a well-known and reputable standard or certification) increases the risk of being misleading or deceptive. Treat these kinds of claims with caution.

False and misleading representations

It is illegal for a business to make a false representation about a product. In particular, a business must not falsely represent that goods are of a particular standard, quality, value, grade, composition, style or model or have had a particular history or previous use. Also, a business must not represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have.

A claim that a product is certified or accredited when this is not true—for example, false claims that a product is certified as organic when there is no certification—contravenes the CCA.

What should businesses do to avoid contravening the CCA?

  • Be able to substantiate all organic claims.
  • Ensure that packaging and promotional materials do not give a false or misleading impression about the organic content.
  • If a blanket statement about your product is likely to mislead or deceive consumers, use a qualified claim that clarifies exactly what is and is not organic.
  • If you promote a product as meeting a certain standard, you must ensure that the product does meet the standard and you should have evidence to substantiate your claim.

What are consumers entitled to expect?

  • That all products labelled as organic are in fact organic.
  • That a product that is only partly organic will be labelled with a qualified claim that makes it clear what part of the product is organic.
  • When the overall impression of packaging, labelling and any advertising used to market a product gives the impression the product is organic, it truly is organic.

The role of the Australian Competition and Consumer Commission

The Australian Competition and Consumer Commission (ACCC) is the national agency responsible for enforcing the CCA. The aim of the CCA is to ensure that Australians can benefit from the promotion of competition and fair trading and to provide consumer protection.

Consumers can use their purchasing decisions to encourage businesses to develop more organic products. However, vague, unsubstantiated, misleading, false or deceptive claims reduce consumers’ confidence in organic claims, which disadvantages legitimate businesses.

The ACCC can take legal action against a trader for contraventions of the CCA. The ACCC particularly targets conduct that is widespread, blatant or involving serious detriment to consumers. For the ACCC to take action against a business, it needs evidence to substantiate the allegation that the business has contravened the CCA. While an ACCC investigation will gather that evidence, complaints that provide detail and set out the basis for concern are more likely to assist the ACCC in pursuing a matter.

Consumers and businesses that have been harmed can also take legal action against businesses for a contravention of the CCA. While no financial penalties presently apply to misleading or deceptive conduct, the ACCC or any other person can seek a court injunction to stop the conduct. Any person suffering loss or damage as a result of the conduct can seek damages.

Fines apply for false representations, including up to $1.1 million for businesses and $220 000 for individuals.

ACCC contacts

If you think you have seen a misleading, deceptive or false organic claim, report it to the ACCC Infocentre. The ACCC Infocentre can also provide you with information about your consumer rights.

ACCC Infocentre 1300 302 502
ACCC website www.accc.gov.au/industrycodes

Callers who are deaf or have a hearing or speech impairment can contact the ACCC through the National Relay Service www.relayservice.com.au.
TTY or modem users—phone 133 677 and ask for 1300 302 502.

Voice-only (speak and listen) users—phone 1300 555 727 and ask for 1300 302 502.

Important notice

This information is for general guidance only. It reflects the ACCC’s views on what is required to comply with certain provisions of the CCA. It does not constitute legal advice and should not be relied on as a statement of the law relating to the CCA. You should obtain legal advice if there is doubt about whether any conduct may contravene the CCA.

Other federal or state laws may impose additional requirements or responsibilities on your businesses when dealing with other businesses or consumers, beyond the requirements of the CCA.